Dream Stocks for Contrarian Investors

Investors are always hunting for the next big stock -- the dream stock whose price increases several times over when the market finally discovers it. It's easy to look back and discover the 10 best stocks of the past decade. But I'm more interested in the tools that can help me evaluate tomorrow's greatest companies.

Motley Fool CAPS offers a variety of resources to aid Fools in finding tomorrow's leaders. Our 165,000-member community is full of investors helping each other beat the market.

We'll enlist CAPS to screen for beaten-down companies, then get the story behind some of its more highly rated stocks that may make a good turnaround play. CAPS' nifty screener will help us find stocks with:

• A market cap of at least $500 million.
• A long-term debt-to-equity ratio of less than 0.5.
• A share price at least 30% below its 12-month high.
• A three-year revenue growth rate of at least 20%.
• A price-to-earnings ratio of less than 25.

Then we'll tap the collective intelligence of our CAPS members to see whether these companies present real opportunities -- or whether the numbers fail to tell the true story.

Opinions with the numbers
Below is a sample of stocks our screen returned.

Data and star rankings from CAPS as of June 11.

Perfect World
CAPS members see more opportunity in shares of Perfect World and have recently bumped up the stock's rating to four stars after the recent drop in price when the company joined others like NetEase.com (Nasdaq: NTES) in giving a weak quarterly sales outlook. Some investors believe the Chinese gaming market may not sustain the massive growth rates it has seen in recent years, but a solid following of CAPS members still see value in Perfect World's shares and like the potential for future releases to help spur new growth.

Overall, 93% of the 476 CAPS members rating Perfect World believe it will beat the broader market.   

Transocean
While CAPS members are increasingly gloomy about BP's (NYSE: BP) prospects after the Deepwater Horizon incident -- with its CAPS rating recently falling to two stars -- a large majority remain bullish on Transocean, which owned the rig that BP was leasing to drill at one of BP's wells.

BP is under intense political pressure to halt or curtail its dividend payments and is also being asked by Washington to set up an escrow account to pay damage claims. Transocean has its share of culpability, but sees strong, long-term demand for its rigs and may see customers move idled rigs in the Gulf of Mexico to foreign waters because of a moratorium.

Some investors are willing to take on many new risks after the stock's drop in price; 97% of the 5,815 CAPS members rating Transocean expect it to outperform the S&P.

Blue Coat Systems
Just as many other tech companies are feeling the effects of the troubled European economy, Blue Coat Systems gave a weaker-than-expected quarterly outlook in part because of Europe's woes. A Citigroup Global Markets analyst recently scaled back his outlook for Oracle (Nasdaq: ORCL) because of a stronger U.S. dollar, and Blue Coat Systems competitor McAfee (NYSE: MFE) expects foreign currency fluctuations to shave $0.04 to $0.05 per share off its second-quarter earnings.

Some CAPS members have faith in Blue Coat's conservative balance sheet and see growth potential in its technology as online networks demand more bandwidth. In CAPS, 92% of the 456 members rating Blue Coat Systems are bullish.  

Let 165,000 members be the jury
The collective wisdom of a huge pool of investors can help give context to a page of numbers from a stock screen. But individual investors are still the best judges of what to do with their own money. Fools should always perform their own due diligence.

Happily, it's easy to chime in with your own opinion. If you agree that these companies present dream opportunities -- or see more of a nightmare instead -- simply scroll down and add your thoughts in the comments box.